With the polls closed and most races decided, we can begin to assess the many changes brought about by Election Day results and attempt to peer into the future to divine what it all means. While predicting what politicians will do is notoriously difficult (and sometimes dangerous!), some general observations on the mood and makeup of Congress are possible. Brewers Association (BA) staff recently participated in an election overview presentation hosted by the office of BA’s legal counsel – following are some of the key points from that session.

Key Post-Election Numbers

U.S. House of Representatives

Republicans – 239 (+60)
Democrats – 189
Still Undecided – 7

U.S. Senate

Republicans – 46 (+6)
Democrats – 53 (includes 2 Independents that caucus with the Democrats)
Still Undecided – 1

Governors

Republicans – 29 (+8)
Democrats – 18
Independent – 1
Still Undecided – 2

Some Observations

Implications of the Election

• Over the last two election cycles, the ranks of the Congressional moderates in both parties have been decimated, which inevitably leads to both parties being more extreme.

• Primaries tend to emphasize differences and so push candidates to the extremes.  The result is a more polarized Congress.

• Because the Democratic Caucus is now further to the left, Nancy Pelosi may have the votes to remain as leader of the Democrats in the House.

• Many powerful and long-serving Democrats from rural districts were defeated.  This appears to be a reflection of the fact that it is increasingly cultural, not economic, considerations that now drive party choice on the part of the electorate.

• The 2012 elections will drive the Congressional agenda for the next two years.

• Republicans believe they have a good chance to take control of the Senate in 2012.

Congress: Cooperation or Gridlock?

• We will get an early indication of whether a cooperative spirit will prevail in Congress over the next two years during the final days of the current session (the “lame duck” session) scheduled to begin on November 15th.  Bellwether issues will be extending the Bush tax cuts, unemployment insurance extensions and passing appropriations legislation.

• Speaker-elect Boehner is a pragmatist which bodes well for cooperation.

The Nation’s Business

• Immigration is an example of an issue that won’t find a cooperative solution in this Congress.  Bits and pieces may be dealt with, but a comprehensive solution won’t happen.

• Similarly, healthcare won’t be comprehensively repealed, but there is a good possibility parts of it will be.

• It is likely that executive action through rulemaking will predominate since moving legislation through Congress may be difficult (e.g. global warming issues handled directly through EPA rather than legislatively through Congress).

• Areas of possible bi-partisan cooperation will be the economy, education and trade. 

• Will the President be willing and able to work in a bipartisan fashion?  This is politically risky as it could alienate his traditional base, but it’s essential to accomplishing anything.  Recall that President Clinton did precisely this, and quite successfully, in the mid-1990’s.

• Some in Washington believe the President is already showing signs of pragmatism by backing off issues such as cap and trade and in talking about tax cut extensions for the middle class.

What does this all mean for small brewers and the legislative efforts of the Brewers Association on federal excise tax legislation and several pending regulatory issues?  No definitive answers here, but there are reasons to be hopeful and for small brewers to remain active and engaged with their Congressional representatives. 

Job creation and small business issues are already being mentioned by both political parties as key areas deserving Congressional action.  The small brewer graduated excise tax legislation (H.R. 4278 and S. 3339) is small business-centric and is a proven jobs creator.  There are still opportunities to make the provisions of this legislation a reality as we head into the last days of this Congress and into the 112th Congress in 2011.  Call, email and fax your Congressional representatives today!